This paper is concerned with a theoretical question as to the definition of instabilities in a granular assembly and its proper formulation at the microscopic level. Recently, this question has taken up much prominence with the emergence of intriguing failure modes such as diffuse failure associated to unstable plasticity of granular materials and microstructural instabilities. An analysis of the second-order work as a general and necessary criterion to detect instabilities is conducted both at the macroscopic and microscopic levels including large deformations. On the basis of a micromechanical analysis of a body consisting of arbitrary interacting particles in a representative element volume (REV), a general formula is derived to quantify the microscopic second-order work involving local variables on the grain scale. The latter emerges as a sum of a configurational term that involves contact forces between neighboring grains, plus a kinetic part consisting of the mechanical unbalance of intergranular forces under dynamics at incipient failure. The present analysis is thought to serve as a clarification of the question of failure in geomaterials typified by a transition from static to a dynamic regime with release of kinetic energy originating from microstructural interactions.